Building A Better P2P World – Have Your Say And Help The FCA

The UK’s financial watchdog, the Financial Conduct Authority, has published a review of the crowdfunding industry and concluded that tighter regulation was needed for peer-to-peer (P2P) lending. Having read the latest materials, we heartily agree.

The FCA states [it has] “observed the variety of loan-based crowdfunding business models, some of which have become increasingly complex.

Based on its findings the FCA is now inviting responses to a number of specific proposals to change the rules for loan-based firms which cover:

  • Proposals to ensure investors receive clear and accurate information about a potential investment and understand the risks involved
  • Ensure investors are adequately remunerated for the risk they are taking
  • Transparent and robust systems for assessing the risk, value and price of loans, and fair/transparent charges to investors
  • Promote good governance and orderly business practices
  • Proposals to extend existing marketing restrictions for investment-based crowdfunding platforms to loan-based platforms

The FCA goes on to say that it has “also observed some poor practice by some firms in the crowdfunding sector, particularly among loan-based platforms. This has arisen as a result of both poor business practice as well as risks around certain business models. Proposals in this consultation seek to improve standards in the sector but in a way that leaves scope for further innovation.

Again, we thoroughly approve of the above, and will be helping all we can in the raising of standards in the P2P sector of alternative finance. Our CEO, Nicola Horlick, comments: “The FCA report stated that the P2P lending business had become increasingly complex, leading to a need for greater scrutiny.

“Money&Co. welcomes this initiative by the FCA.  Since we started lending in the middle of 2014, we have stuck rigidly to our original business model.  We identify potential borrowers, analyse their creditworthiness with reference to our credit framework, assign a credit rating and then offer the loan to our lenders.  We then collect interest from the borrower, take our fee of 1% per annum and pass the rest to our lenders.

“Regulation is there to protect our lenders.  However, it is important to ensure that it does not become so onerous that we are unable to operate efficiently.  Money&Co. is a member of the UK Crowdfunding Association and we will be liaising with other members to formulate a position during the consultation with the FCA.”

If you have any thoughts about the way in which P2P lending is regulated, please do contact us (


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.